Pending sales dropped by .5 percent in May compared to April 2018 according to the National Association of Realtors. Pending home sales were also 2.2 percent lower than the same month in 2017. Part of the reason for the drop was the competitive market and high home prices in California and throughout the country. While there is a lot of interest in available homes, the supply of homes isn’t necessarily enough to meet that demand.
While the number of homes available was up in May compared to April, it was down 6.1 percent from this time last year. Based on May pending sales numbers, there is a 4.1 month supply of homes, and a six-month supply is considered a balanced market. As supply is limited, home prices have increased while increased mortgage rates have also been a factor in determining how much home a person can afford.
Applications for mortgages have dropped in recent weeks, and this is in spite of the fact that mortgage rates have remained stable over this time period. It is likely that pending sales will not increase in June considering the lack of mortgage applications. Although new home construction was up in May, most of the homes were located in the South where prices are the lowest. Pending sales in the West were up .6 percent from April to May.
Individuals who are looking to buy a residential property may get the best price by monitoring the market. This may be done by consulting with a real estate agent. Working with an attorney may also help an individual understand the terms of a mortgage or purchase contract. An attorney may also be able to review any title or zoning issues that the home may have prior to the deal closing.